Advances with European Social Fund financial instruments

Published on 11 December 2018

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Three newfi-compass publications covering European Social Fund (ESF) topics are now available in our website’s library. These cover useful information and advice about: the implications of State aid rules for ESF financial instruments; a pioneering Social Impact Bonds Programme and Social Innovation Initiative in Portugal; and guidance for ESF managing authorities that are interested in setting up a microcredit financial instrument.

Whenever public authorities provide funding to support economic activities, care has to be taken to ensure that it complies with the EU rules on State aid. ESF managing authorities implementing financial instruments should ensure State aid compliance at all levels of the implementation. State aid may be present at different levels and compliance with the State aid rules at the final recipient level, in the context of financial instruments, is not enough.

Portugal is the setting for another new fi-compass publication that explains innovative ESF financing instruments. These are being implemented during the 2014-2020 programming period through a Social Innovation Initiative, and the fi-compass publication is a study report focused on the initiative’s Social Impact Bonds Programme.

ESF managing authorities are a key audience for the new fi-compass publication providing advice about microcredit financial instruments.

In order to support vulnerable persons and micro-enterprises, a microcredit is a suitable financial instrument to combine EU funds with public and private resources to provide access to finance. Microcredit can be particularly relevant for providing loans for business purposes and to vulnerable groups usually excluded from mainstream finance.